CDs & IRAs

Individual Retirement Account (IRA)

Traditional IRAs

Contribution may be fully or partially deductible depending on your income level and participation in an employee-sponsored retirement plan

You can contribute if you are under age 70½ for the entire year and have earned income

Funds may be withdrawn without penalty after you reach 59½ or sooner for other reasons (disability, excessive medical expenses, higher education, first time home purchase) within certain limitations

Funds must start to be distributed after reaching age 70½ years

Roth IRAs

Nondeductible from your taxes

Tax-free withdrawals once you fulfill certain criteria

You can still contribute even beyond the age of 70½ years

You may contribute $5,000 or $6,000 (depending on your age) or up to 100% of your income whichever is less, as long as your Modified Adjusted Gross Income (MAGI) is within the limits shown below

After holding the Roth IRA for a five-year period, upon reaching age 59½ you may begin to take distributions from your Roth IRA and you will not pay any federal taxes on any of the contributions or earnings

Plus, with a Roth IRA, there is no mandatory age to begin making withdrawals

If you are under 50 years of age at the end of 2015: The maximum contribution that you can make to a traditional or Roth IRA is the smaller of $5,500 ($6,500 if you're age 50 or older) or the amount of your taxable compensation for 2015. This limit can be split between a traditional and a Roth IRA but the combined limit is $5,000. The maximum contribution to a Roth IRA and the maximum deductible contribution to a traditional IRA may be reduced depending upon your modified adjusted gross income (modified AGI).

Coverdell Education Savings Account

Previously called the Education IRA

Designed to help parents, grandparents, aunts or uncles save for a family member's or loved one's higher education

Contributions are not tax deductible

Earnings are tax-free

Funds must be to pay for primary, secondary or college education expenses for a designated person

Contributions can be as much as $2,000 per year, per designated person

Designated beneficiary must be under the age of 18

Any balance must be distributed within 30 days after the date the beneficiary reaches age 30